Inflation numbers above expectations at 6.84% - TRANS SCAN

Headline inflation came in above expectations at 6.84 pct, but economists estimate core inflation to have sharply slowed to 3.8 pct. The Wholesale Price Index (WPI)-based inflation for February came in at 6.84%, higher than 6.62% recorded in the previous month. The inching up of WPI inflation, which is the main gauge for inflation, has raised some doubts about RBI going in for any aggressive policy rate cut on March 19. A modest 25 basis points cut is expected on policy rate given that RBI has praised the recent budget as "responsible budget" for its fiscal consolidation efforts.

RBI governor has said "stubborn" inflation remains a major obstacle to growth in India, dimming expectations of an interest rate cut when policymakers meet next week. RBI slashed the main interest rate in January for the first time in nine months after a fall in inflation and calls from the government and business leaders for lower borrowing costs.

RBI governor reiterated his concern late Wednesday about persistently high inflation, despite the wholesale price index falling to a more than 3-year low of 6.62% in January.

Source : Equity Bulls

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